Fu Hai Construction v Econ Corporation: Misrepresentation & Construction Subcontract Dispute
Fu Hai Construction Pte Ltd sued Econ Corporation Limited in the High Court of Singapore on 31 August 2002, alleging misrepresentation in a construction subcontract for a Housing and Development Board (HDB) project. Fu Hai claimed Econ made false representations regarding man-year entitlements, soil conditions, and the scope of the contract. The court, presided over by Justice Lai Siu Chiu, found that Econ had misrepresented the soil conditions and scope of the contract, leading Fu Hai to enter into an unprofitable agreement. The court rescinded the subcontract, directed Econ to return the performance bond, and dismissed Econ's counterclaim for additional costs.
1. Case Overview
1.1 Court
High Court1.2 Outcome
Judgment for the Plaintiff
1.3 Case Type
Civil
1.4 Judgment Type
Grounds of Decision
1.5 Jurisdiction
Singapore
1.6 Description
Fu Hai Construction sued Econ Corporation for misrepresentation in a construction subcontract. The court rescinded the contract and dismissed Econ's counterclaim.
1.7 Decision Date
2. Parties and Outcomes
| Party Name | Role | Type | Outcome | Outcome Type | Counsels |
|---|---|---|---|---|---|
| Fu Hai Construction Pte Ltd | Plaintiff | Corporation | Judgment for the Plaintiff | Won | Simon Yuen, Gavin Goh |
| Econ Corporation Limited | Defendant | Corporation | Counterclaim Dismissed | Lost | Tan Cheow Hin, Sheerin Amin |
3. Judges
| Judge Name | Title | Delivered Judgment |
|---|---|---|
| Lai Siu Chiu | Judge | Yes |
4. Counsels
| Counsel Name | Organization |
|---|---|
| Simon Yuen | Tan & Lim |
| Gavin Goh | Tan & Lim |
| Tan Cheow Hin | Cheow Hin & Partners |
| Sheerin Amin | Cheow Hin & Partners |
4. Facts
- Fu Hai Construction entered into a subcontract with Econ Corporation for a HDB project.
- Econ Corporation allegedly made representations about man-year entitlements, soil conditions, and the scope of the contract.
- The soil contained backfill of rubbish, which was not disclosed to Fu Hai Construction.
- Fu Hai Construction was required to coordinate works of other subcontractors without compensation.
- Econ Corporation attempted to procure a performance bond for 25% of the subcontract value.
- Econ Corporation terminated the subcontract due to Fu Hai Construction's alleged breaches.
- Fu Hai Construction sought rescission of the subcontract and cancellation of the performance bond.
5. Formal Citations
- Fu Hai Construction Pte Ltd v Econ Corporation Limited, Suit 1070/2001, [2002] SGHC 201
6. Timeline
| Date | Event |
|---|---|
| Fu Hai Construction Pte Ltd incorporated in Singapore. | |
| HDB awarded the contract to Econ Corporation Limited. | |
| Works commenced on the project. | |
| Dr. Jeffrey Wang offered to introduce Qiu Chang Hai to Econ Corporation Limited. | |
| Qiu Chang Hai met with Sim Peck Hoon and Lai Leong Chong of Econ Corporation Limited. | |
| Qiu Chang Hai was handed a contract by Econ Corporation Limited for his signature. | |
| Fu Hai Construction Pte Ltd's representatives attended the first site meeting with representatives of Econ Corporation Limited. | |
| Tai Ping Insurance Co Ltd provided the performance bond. | |
| Fu Hai Construction Pte Ltd signed the subcontract with Econ Corporation Limited. | |
| Plaintiffs' subcontractor commenced excavating the basement for the shopping centre. | |
| Econ Corporation Limited gave Fu Hai Construction Pte Ltd three days' notice of termination. | |
| Econ Corporation Limited terminated the plaintiffs' contract. | |
| Econ Corporation Limited called on the performance bond. | |
| Fu Hai Construction Pte Ltd obtained an ex parte injunction to restrain Econ Corporation Limited from calling on Tai Ping for payment on the performance bond. | |
| Judgment was delivered in the High Court of Singapore. |
7. Legal Issues
- Misrepresentation
- Outcome: The court found that the defendants made misrepresentations regarding the soil condition and scope of the contract.
- Category: Substantive
- Sub-Issues:
- Non-disclosure of material facts
- Inducement to enter contract
8. Remedies Sought
- Rescission of the subcontract
- Cancellation of the performance bond
- Damages
9. Cause of Actions
- Misrepresentation
10. Practice Areas
- Commercial Litigation
- Construction Disputes
11. Industries
- Construction
12. Cited Cases
| Case Name | Court | Affirmed | Citation | Jurisdiction | Significance |
|---|---|---|---|---|---|
| Chitty on Contracts | N/A | Yes | Chitty on Contracts (28 ed vol 1 para 6-013 at p 343) | N/A | Cited for the principle that mere non-disclosure does not constitute misrepresentation, but that there are exceptions to the general rule. |
| Hudson's Building and Engineering Contracts | N/A | Yes | Hudson's Building and Engineering Contracts (11 ed vol 1 at para 1.145 p 73) | N/A | Cited for the principle that mere non-disclosure does not constitute misrepresentation. |
13. Applicable Rules
| Rule Name |
|---|
| No applicable rules |
14. Applicable Statutes
| Statute Name | Jurisdiction |
|---|---|
| Misrepresentation Act Cap 390 | Singapore |
15. Key Terms and Keywords
15.1 Key Terms
- Subcontract
- Misrepresentation
- Performance bond
- Man-year entitlement
- Soil condition
- Scope of contract
- Rescission
- Liquidated damages
- Progress claims
15.2 Keywords
- construction
- subcontract
- misrepresentation
- performance bond
- Singapore
- rescission
16. Subjects
- Construction Dispute
- Contract Law
- Misrepresentation
17. Areas of Law
- Misrepresentation
- Construction Law
- Contract Law